Measuring Piracy on PS3

Mike Masnick at Techdirt is fuming over Sony’s decision to remove the ability to install third-party operating systems on the Playstation 3 with their next big firmware upgrade. I don’t think I was even aware of the feature, so it’s of little practical import to me, but apparently there are quite a few coders and scientists out there who got PS3s precisely because, with Linux loaded, they can not only double as computers, but can be networked into a cheap supercomputing cluster. It’s a feature Sony promoted in its marketing: The company touted an all-in-one system that would allow users to “play games, watch movies, view photos, listen to music, and run a full-featured Linux operating system that transforms your PS3 into a home computer.” It’s because of this very feature that the U.S. government bought thousands of the pricey boxes. Now users have to choose. If they refrain from updating their consoles, they surrender the ability to play newer BluRay discs and games, or to use the Playstation Network. If they do update, they lose their Linux—a feature a relatively small proportion of users take advantage of, but probably a central selling point for those who do. So I’ll throw in with Mike: Hugely bogus on Sony’s part.

What intrigued me especially, though, was a comment on a site discussing the user hack that apparently started all this. Very (very) briefly, hacker George Hotz apparently found a way to use the other-OS feature to get low-level access to the system, which only the folks at Sony and IBM are supposed to enjoy. And while there’s still a thick layer of encryption in place, this is in theory a step toward PS3 owners eventually being able to install cheats and (still more worrisome) circumvent DRM on games and videos. In short, Sony’s trying to preempt this by ensuring that system owners aren’t able to avail themselves of Hotz’s exploit if it should ever progress to that point. This exchange between commenters Vasenor and Mingster on the Eurogamer forum caught my eye:

Vasenor: If it does get cracked I’d find it interesting what happens to the sales numbers for PS3 games. Generally platforms have been cracked so quickly that doing a before and after comparison was basically impossible. Then again what is likely to happen is that any poor sales performance on a game which doesn’t quite cut it would be blamed on Piracy.

Mingster: Yeah its interesting that even though there is no piracy on the Ps3 that a multiplatform title still sells as many if not more on the 360. It sort of means that piracy isn’t that big a factor for low sales.
There really should be an article about this as its the only system that can’t blame poor sales on piracy. (at the moment)

For various reasons taken up by others, it’s not clear at all that there will be any brave new world of PS3 piracy opening up, so there’s probably not going to be a “before and after.” But I hadn’t realized that we’re currently operating in a console market where, in essence, piracy is possible (with some difficulty and drawbacks) on two of the three major competing systems, but not on the third. Obviously there are a ton of other factors about the demographics of each console’s user base to take into account—most obviously, people who would want to pirate games might be more likely to buy the systems on which you can pirate games—but given that titles for the two most directly comparable systems (PS3 and Xbox) seem to be priced similarly, this seems like one natural way to try to gauge the real effect of piracy on sales: Pick a couple of multiplatform titles, and then see if there’s any conspicuous difference in the ratio of units sold to consoles in active use for each system. You couldn’t put too much stock in the results for any single title, but if a pattern emerged across the libraries, you’d surely have something.

9 responses so far ↓

I think there are too many confounding effects to put much stock in the results of such analyses, unfortunately. Different games appeal to different demographics, who will have varying interest and talent at piracy; the same can be said of consoles. And different consoles have very different piracy systems — stealing Nintendo DS content is a breeze compared to the hoops that have to be jumped through for the 360. Maybe this is all that you’re getting at, but to the extent that you’re looking to quantify videogame piracy in the state of nature, I think the answers will be meaningless without specific context.

Unrelatedly: George Hotz is pretty amazing — he’s also one of the most important figures w/r/t the unlocking of the iPhone — and worth following (@geohot on twitter).

Tom, you’re right that the data is muddled by numerous confounding factors. However the data might still be useful. In particular, it might be sufficient to counter claims that piracy is having a “huge and devastating” effect. In particular, if the effects of piracy are too small to be seen amid all the noise regarding demographics, style of games, distribution speed, etc. then how can console companies reliably claim that piracy is having an effect? They, too, would be unable to support that claim. (A “devastating” trend should be relatively easy to detect.)

Furthermore, this could provide evidence that piracy is a red herring: rather than worry about piracy (and add DRM, etc.), companies should be worrying about those other factors (and thus working harder on demographics or streamlining distribution channels).

Well, it might be. Believe me, I want to believe that DRM is a flawed strategy. But I suspect that the folks at places like EA have done the math and only grudgingly concluded that annoying their customers and paying to license antipiracy software is worth their while.

I’ve argued from exactly the opposite perspective w/r/t music, by the way. But I think the two situations are fundamentally different. Executables can be secured in ways that data formats can’t (not perfectly, but considerably more can be done to make reverse engineering a pain), and you can’t just substitute other technology for, say, GTA4 the way you can substitute an ogg or mp3 for a wma. The economic model is also different: there’s a greater per-unit incentive to pirate videogames; their sales cycle is typically fairly short, so the security only needs to last for a few months; and there aren’t other goods like concert tickets that can be used to justify losses to piracy as a promotional cost. Plus greater capital requirements mean that the videogame market isn’t as close to perfect competition as the one for bands — you can get away with making your customers jump through DRM hoops.

But I suspect that the folks at places like EA have done the math and only grudgingly concluded that annoying their customers and paying to license antipiracy software is worth their while.

I don’t doubt that they have some mental/mathematical model in which their actions are rational, but I do wonder if they’ve empirically tested it.

One has to imagine that if you worked at EA, those pirate kids would be really damn annoying. Just like foreign policy, there are no doubt many “piracy hawks” within any software company for whom “defeating” the pirates is not just necessary to continue making money, but an end in and of itself.

Keep in mind there’s a big difference between no copy protection and some copy protection. There’s a much smaller difference between some copy protection and incredibly good copy protection.

How many actual, installed units are using modifications to steal games? 2%? 5%? I could believe higher numbers in some poor countries, where the number of installed units is small to begin with. But I have a hard time imaging high numbers in Japan, the US or Europe.

And hacking the iPhone is ridiculously easy, requiring no special equipment, no irreversible hardware modification, or cash outlay. The fact is, most people just don’t want to bother, because they are happy with the system as delivered.

I would argue that you’ll probably find similar extremely low numbers for almost every platform that has basic copy protecti0n that is relatively easy to crack.

But I have a hard time seeing it rise above the 5% range on any platform that requires you to jump a few basic technical hoops. So, at best, the difference between OK copy protection and incredibly invasive copy protection is perhaps 5% of sales.

Now, I’m not defending pirates or claiming that pirates are doing nothing wrong. But Sony needs to think about the sales they will really lose by allowing their copy protection to drop from “really good” to “just OK”, versus the sales lost by getting raked over the coals in the media by some extremely vocal, and extremely capable, technical users.

versus the sales lost by getting raked over the coals in the media by some extremely vocal, and extremely capable, technical users.

It’s probably not sales so much as programmer goodwill towards the Cell architecture that’s at stake on this side of the equation. It’s new and rather different from what programmers are used to, so the programming community has a lot of collective knowledge and lore to accumulate to catch up with optimizing on more orthodox platforms.

Although I agree that Sony is in a somewhat unique position, having positioned the PS3 and the Cell as a research platform, I’m not sure the willingness of alt-OS folks to use the box has a meaningful effect on platform adoption by game developers.

That is, I don’t really see a for-profit game developer throwing down the gauntlet and saying, “since you took alternate OS capability away from users, I refuse to program for PS3 or the Cell.”

On the other hand, the alpha-geeks will definitely make big brouhaha out of it, and for what? Keeping copied games out of the hands of the microscopic number of PS3 owners who can exploit whatever @geohot has figured out?

The alt-OS users, including academia and government, would push collective knowledge and discovery of Cell-specific optimizations forward faster.

To a for-profit game developer, that could make the difference between it being worthwhile to make a PS3-only game that spends a lot of development time squeezing every last drop of performance out of Cell, or a multi-platform game that works passably well on PS3.

I am making assumptions here about how much any given developer relies on the knowledge of people outside their own company–I suspect it’s a lot, but I don’t really know.